Welcome back! Ask questions, get answers, and join our large community of tax professionals.
cancel
Showing results for 
Search instead for 
Did you mean: 

Wrong distribution code on 1099R

tomead64
Level 2

I have a situation I have never encountered before.  A client inherited an IRA that was split into 2 beneficiary IRAs by the custodian.  It was then transferred directly to Edward Jones into another beneficiary IRA.  The client received a 1099-R with "4" in box 7 and not "4G" which resulted in box 2A being for a taxable amount of the entire value instead of 0.  Both the transferring and receiving custodians are of little help to the client but I have enough paperwork from both to clearly show a direct rollover.  Should I have this client wait for a resolution and corrected 1099-R (if he gets one) or should I do a1040 showing the income and then a 1040-X with the correction and an explanation with all of the documentation attached?

 

Thanks in Advance!

 

 

 

Labels (1)
0 Cheers
1 Solution

Accepted Solutions
BobKamman
Level 14

Paying tax that is not owed and then hoping to get it back:  Nonsense.  Waiting for paperwork that might never arrive or be sent to IRS, the only place it matters:  Insanity.  

Why not file an accurate return, showing it was rolled over with a trustee-to-trustee transfer if that's what happened?  

View solution in original post

3 Replies 3
BobKamman
Level 14

Paying tax that is not owed and then hoping to get it back:  Nonsense.  Waiting for paperwork that might never arrive or be sent to IRS, the only place it matters:  Insanity.  

Why not file an accurate return, showing it was rolled over with a trustee-to-trustee transfer if that's what happened?  

View solution in original post

qbteachmt
Level 15

You describe Two Transfers. Who issued the 1099-R? Is that the first or the second transfer?

I googled "4G" for you.

"A spousal beneficiary would only receive code 4G if they directly rolled assets over from a qualified employer plan to a traditional IRA. If the spousal beneficiary rolled the assets from an IRA to their own IRA, they would receive code 4 on their Form 1099-R."

*******************************
"Level Up" is a gaming function, not a real life function.
0 Cheers
tomead64
Level 2

Thanks, we got it figured out. Navy Federal sent the 1099-R with a taxable amount of the entire amount.  I went back and went with the 4 and a taxable amount of $0 and showed it as a rollover.  Since I have never had this scenario before with the rollover shown as taxable on the 1099-R I was a bit concerned that even after filing a correct and accurate return that the IRS would come looking for taxes for what was shown as taxable on the 1099-R from Navy Federal.  With the advice I have received I feel comfortable with how we will be submitting it.

 

0 Cheers